Compromise eases moratorium’s chill

Jackson County commissioners approved a five-month moratorium on new subdivisions in a 4 to 1 vote last week, but not without tacking on a compromise measure that will give developers caught in the lurch a way out.

The moratorium is supposed to stop a rush of developers trying beat the deadline for new development regulations coming down the pipe. The compromise measure will allow developers with brand new subdivisions to move forward despite the moratorium if they will agree to basic codes and regulations for their development. It will still stop developers with shoddy plans from sneaking in before the new regulations take effect, but give those willing to comply with some rules a chance to keep working.

“The only people we are going to stop — which is exactly what this moratorium is intended for — is people who want to continue with absolutely no regulations,” said Commissioner Will Shelton.

The move theoretically appeases fears of job losses due to a work slow-down from the moratorium. But those in the development and real estate industry disagreed, claiming the very notion of a moratorium puts a chilling effect on the industry.

“Just the word moratorium alone has created such a panic,” said Commissioner Chairman Brian McMahan said. McMahan was the lone vote against the moratorium.

More than 1,300 people attended a public hearing on the moratorium two weeks ago. A public comment session at the beginning of the commissioners meeting last week was a miniature repeat of that public hearing, with speakers on both sides giving impassioned pleas for or against the moratorium in their allotted three minutes.

Those in the real estate and development industry once again railed against the commissioners.

“Shame on you for dividing the county like this,” said Carole Odom. “You aren’t going to save their mountains. First of all, it’s not their mountains. It is private property. They are trespassing every time they think they need to go hug a tree up there. The building is not going to stop. Thank God the building is not going to stop.”

Supporters of the moratorium hope the building will at least slow down to a sustainable pace, however.

“We are sick and tired of being sick and tired of being sick and tired of the mountains be raped and butchered,” said James McCarthy. “You will hear the deep pocketed people talking about what their rights are and I am sick and tired of listening to it.”

But construction workers argued that those deep-pocketed developers give them jobs.

“The developers own the land, but the local people are the ones that do the work,” said Buddy Smith.

Nola Brown, a fifth generation resident of Jackson County, objected to claims that the only supporters of the moratorium were newcomers.

“When we were kids we could roam all over the Tuckasegee mountains,” said Brown. “With the rapid pace of development it seems like most of Jackson County is being gobbled up by out-of-towners who sequester themselves in gated communities.”

Opponents of the moratorium wore stickers proclaiming “Moratorium on Cowan, Jones in ‘08.” Commissioners Joe Cowan and Mark Jones are both up for election in 2008. Commissioners Tom Massie and Will Shelton are up for election in 2010.

Supporters of the moratorium claim the county commissioners had a mandate from voters to take strong action on controlling development. All four commissioners ran on a pro-planning platform in the last election. Massie and Shelton were the most vocal on the need to control development, and were the top vote-getters of the four.

Commissioner Tom Massie said the moratorium is necessary to stop a flood of developers from trying to beat the deadline on pending regulations. The makings of such a tidal wave began in January when it became clear a development ordinance was eminent, Massie said. The number of new lots recorded in January more than tripled over the number seen during the previous four months, Massie said.

The tide swelled even more in February before the commissioners were able to enact a temporary halt pending the outcome of the moratorium vote. In just a couple of weeks in February, more than 289 lots were recorded — a 10-fold swell over the previous four months. Massie said it was clear developers were trying to get lots recorded before new regulations took effect, making the moratorium necessary.

The moratorium will be lifted as soon as a development ordinance is in place — in five months or less. The county planning board is working on a rough draft of the ordinance. Final approval is up to the commissioners. There will be at least one public hearing on the ordinance.

The compromise deal

Developers who would otherwise be halted by the moratorium can opt to move forward under the compromise deal. If the developer agrees to comply with standards for their subdivision, they will be exempt from the moratorium. The moratorium will still meet its purpose: staving off a rush of developers trying to get grandfathered in under the no-rules climate of yesterday, while those willing to play by some rules can move forward, commissioners said.

“It’s a voluntary agreement to meet minimum standards that are in the public’s best interest,” Massie said. “The only afflicted parties to this moratorium are going to be those individuals who want to do subdivisions with no regulation whatsoever.”

Exactly what those standards will be is not clear, however. Instead, the county planners would sit down with each developer seeking an exemption on a case-by-case basis and decide what is appropriate for them. The developer would then enter a contract with the county. They would get to build their subdivision under the terms of the contract and not be affected by countywide development regulations coming down the pipe at the end of the five-month moratorium.

“They don’t have to worry about the rules changing,” Massie said. “They can get the financing because they know what the rules are. They can continue with the planning and design of that subdivision, hiring the engineers and landscapers, they can construct and build roads and do whatever they need to do.”

Commissioners said the compromise deal will put the onus back on developers. At the public hearing, dozens of speakers claimed they didn’t oppose regulations, they only objected to a moratorium.

“Almost every comment I heard was prefaced with ‘We are for reasonable regulations and guidelines,’” Shelton said. “So those people who are willing to do that can enter into the development contract.”

Those in the real estate and development industry had mixed reactions to the compromise deal, which came as a surprise when pitched by commissioners at the meeting last week. Sam Lupas, the owner and broker of Landmark Realty in Cashiers, said the moratorium will still have a chilling effect on the county’s economy. He also feared the contract was a way for the county to trap developers and was equivalent to signing their rights away.

Lupas claimed he had a developer lined up to buy a tract who will likely walk away now. He wasn’t sure whether the compromise deal would convince them to stay.

Jay Pavey, a real estate attorney in Sylva, said he also has a deal pending with a buyer. The compromise deal will likely be a “deciding factor” if they go through with the deal, Pavey said. Pavey said the compromise will be important to those who have already bought land but not started their project yet. He has one such client with a $580,000 mortgage.

“If he can’t develop it, he will go bankrupt,” Pavey said. The compromise deal, although not ideal, would allow him to go forward.

Several developers could hit trouble when the moratorium is lifted and the new development regulations go into place, Pavey said. Developers bought tracts banking on being able to sell enough lots to cover their costs. A developer has significant upfront costs including land purchase, road building, surveying, engineering and marketing.

“They make all their money on the back end,” Pavey said.

If the development regulations are too limiting — such as lot size, road widths, and set backs from creeks — they won’t be able to fit as many lots in the development as they hoped and won’t be able to recoup their costs on the property, Pavey said.